HQ 220491: Internal Advice No. 47/86; Protests 1001-84-017473, 1001- 84-203618 through 1001-84-203637, 1001-86-200512, and 101- 86-001697; 19 U.S.C. 1520(c)(1) Dear Sir:

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                            HQ 220491

                         January 8, 1991

LIQ-9-01-CO:R:C:E 220491 PH

CATEGORY:  Liquidation

Area Director of Customs
New York Seaport, New York

RE:  Internal Advice No. 47/86; Protests 1001-84-017473, 1001-
     84-203618 through 1001-84-203637, 1001-86-200512, and 101-
     86-001697; 19 U.S.C. 1520(c)(1)
 
Dear Sir:

     Internal Advice Ruling No. 47/86 (copy enclosed for your
convenience) was sent to you on April 19, 1988 (File:  CLA-2
CO:R:CV:V 543912 EK).  The ruling did not address 49 liquidated
entries upon which you also sought advice.  The file was
forwarded to this office for our advice on those entries.  Our
advice follows.

FACTS:

     According to the file, in the years 1982 - 1985, the client
of the law firm which asked that this internal request be sent to
Headquarters imported quantities of baseball caps, baseballs, and
softballs.  The complicated factual situation, with regard to the
basis for valuation of the imported merchandise, is described in
the April 19, 1988, ruling.  Suffice it to say that, for purposes
of our advice on the 49 liquidated entries, some of which were
protested under 19 U.S.C. 1514 and for some of which reliquida-
tion under 19 U.S.C. 1520(c)(1) was requested, a Customs audit to
determine the feasibility of deductive value for the baseball
caps was commenced in August of 1984.  This audit was suspended
and it was discontinued in June of 1985 when a Customs field
office determined that a transaction value of identical or
similar merchandise pursuant to 19 U.S.C. 1401a(c) was available.

     The April 19, 1988, ruling held, with regard to the baseball
caps, that "[u]pon receipt of the necessary information [i.e.,
documentation necessary to appraise the merchandise pursuant to
deductive value], and assuming it meets the statutory require-
ments of deductive value pursuant to section 402(d), then
appraisement pursuant to that section is proper."  With regard to
the appraisement of the baseballs, it was stated that it was
Customs position that documentation with respect to deductive
value had not been substantiated.  As with the baseball caps, the
ruling held that upon receipt of the necessary information,
"assuming it meets the statutory requirements of deductive value
pursuant to section 402(d), then appraisement of the baseballs
pursuant to deductive value is proper as well."

     By letter of November 15, 1984, the representative of the
importer requested that liquidation of all unliquidated entries
of baseballs, softballs, and baseball caps be withheld pending
completion of the audit being conducted to verify deductive value
information.  According to this letter, "[l]iquidation was
recently resumed by new [Customs] officials responsible for caps,
notwithstanding the withholding of appraisement in May 1983 by
the Customs officials previously responsible for caps pending
completion of the audit."  It was stated that recently liquidated
entries have been protested and it was requested, pursuant to 19
U.S.C. 1520(c)(1), that certain entries liquidated less than one
year before the date of the November 15, 1984, letter be
reliquidated on the basis of deductive value, pending completion
of the Customs audit.

     By letter of February 28, 1986, the representative of the
importer requested that internal advice be sought on the
protests, requests for reliquidation, and proper appraisement of
the unliquidated entries of the baseball caps, baseballs, and
softballs under consideration.  Such internal advice was sought
in your memorandum to this office of March 13, 1987.

     In your memorandum of March 13, 1987, you recommended, with
regard to the liquidated entries for which you sought internal
advice, that the requests for reliquidation under 19 U.S.C.
1520(c)(1) be denied because that provision precludes reliquida-
tion for a mistake in the construction of a law, which you state
appraisement would be.  You recommended that the protests under
19 U.S.C. 1514 be denied because the 90-day period for filing
such protests had expired.

     By letter of April 22, 1988, the representative of the
importer described the basis of her petitions for relief under 19
U.S.C. 1520(c)(1).  The mistakes of fact stated to be the basis
for relief were "(i) the existence of an ongoing audit unknown to
the liquidators of these entries, which was being conducted in
order to verify data which had been submitted to support a
deductive value appraisement; and (ii) that the liquidation of
other entries containing identical merchandise was being extended
for the same reason, i.e., that the information necessary to
liquidate the entries was not yet available."  It is stated that
the Customs commodity team which liquidated these entries was not
aware of the procedural history of this matter and the pendency
of the audit and that "the Area Director had granted [the]
request dated November 15, 1984 that the liquidation of open
entries be extended pending collection and verification of value
data in the audit."
 
ISSUES:

     (1)  If the protests filed in this case under 19 U.S.C. 1514
were timely filed, may the protests be granted?

     (2)  Were the liquidations of entries in this case clerical
errors, mistakes of fact, or other inadvertences not amounting to
errors in the construction of law under 19 U.S.C. 1520(c)(1) and,
if so, may the entries for which a request for reliquidation was
filed under that statute be reliquidated?

LAW AND ANALYSIS:

     Under section 514(a), Tariff Act of 1930, as amended (19
U.S.C. 1514(a)), a protest may be filed against, among other
things, "the appraised value of merchandise".  Under paragraph
(c)(2) of section 514, a protest of a decision, order, or finding
described in paragraph (a) of section 514 must be filed within 90
days after the notice of liquidation or reliquidation or the date
of the decision as to which the protest is made.

     Under section 520(c)(1), Tariff Act of 1930, as amended (19
U.S.C. 1520(c)(1):

        Notwithstanding a valid protest was not filed,
        [Customs] may, in accordance with regulations
        prescribed by the Secretary, reliquidate an entry
        to correct ... (1) a clerical error, mistake of
        fact, or other inadvertence not amounting to an
        error in the construction of a law, adverse to
        the importer and manifest from the record or
        established by documentary evidence, in any
        entry, liquidation, or other customs transaction,
        when the error, mistake, or inadvertence is
        brought to the attention of [Customs] within one
        year after the date of liquidation or exaction
        ....

     If, as you indicate, the protests filed under 19 U.S.C. 1514
in this case were filed more than 90 days after the date of the
notice of liquidation, these protests must be denied.  If these
protests were timely filed, action on them should be consistent
with the April 19, 1988, ruling.  That is, "[u]pon receipt of the
necessary information [i.e., documentation necessary to appraise
the merchandise pursuant to deductive value], and assuming it
meets the statutory requirements of deductive value pursuant to
section 402(d)," the protests filed under section 1514 should be
granted.  If the "necessary information" has not yet been
provided to Customs, the protestant should be given the
opportunity to do so by means of a written notice, enclosing a
copy of this ruling and the April 19, 1988, ruling, stating that
the protestant has 90 days from the date of the notice to provide
Customs with the required information.  If the information is not
provided within this period, the protests filed under 19 U.S.C.
1514 should be denied or, if application was made for further
review and the criteria for such review are met (see 19 CFR
174.24), forwarded for further review.

     According to the file and our review, the requests for
reliquidation under 19 U.S.C. 1520(c)(1) were timely filed.  They
should be treated as outlined below. 

     The relief provided for in 19 U.S.C. 1520(c)(1) is not an
alternative to the relief provided for in the form of protests
under 19 U.S.C. 1514; section 1520(c)(1) only offers "limited
relief in the situations defined therein" (Phillips Petroleum
Company v. United States, 54 CCPA 7, 1, C.A.D. 893 (1966), quoted
in Godchaux-Henderson Sugar Co., Inc., v. United States, 85 Cust.
Ct. 68, 69, C.D. 4874 (1980); see also, Computime, Inc. v. United
States, 9 CIT 553, 555, 622 F. Supp. 1083 (1985), and Concentric
Pumps, Ltd. v. United States, 10 CIT 505, 508, 643 F. Supp. 623
(1986)).

     The three situations giving rise to relief under 19 U.S.C.
1520(c)(1), assuming that the other requirements therein are met,
are (1) a clerical error, (2) a mistake of fact, and (3) an
"other inadvertence", none of which may amount to an error in the
construction of a law and each of which must be adverse to the
importer and manifest from the record or established by
documentary evidence.  These terms, as used in 19 U.S.C.
1520(c)(1), have frequently been interpreted by the Courts.

     It has been stated that "[a] clerical error is a mistake
made by a clerk or other subordinate, upon whom devolves no duty
to exercise judgement, in writing or copying the figures or in
exercising his intention" (see PPG Industries, Inc., v. United
States, 7 CIT 118, 124 (1984), and cases cited therein).  It has 
been held that a "mistake of fact exists where a person under-
stands the facts to be other than they are, whereas a mistake of
law exists where a person knows the facts as they really are but
has a mistaken belief as to the legal consequences of those
facts" (Hambro Automotive Corporation v. United States, 66 CCPA
113, 118, C.A.D. 1231, 603 F. 2d 850 (1979), quoted in Concen-
tric Pumps, Ltd., v. United States, supra at 508; see also, C.J.
Tower & Sons of Buffalo, Inc. v. United States, 68 Cust. Ct. 17,
22, C.D. 4327, 336 F. Supp 1395 (1972), aff'd, 61 CCPA 90, C.A.D.
1129, 499 F. 2d 1277 (1974), and Universal Cooperatives, Inc. v.
United States, Vol. 23 Cust. Bull. & Dec., No. 29, July 19, 1989,
page 38, 40, CIT Slip Op. 89-89).  Inadvertence has been defined
as "an oversight or involuntary accident, or the result of
inattention or carelessness, and even as a type of mistake"
(Occidental Oil & Gas Co. v. United States, Vol. 23 Cust. Bull. &
Dec. No. 17, April 20, 1989, page 40, 42, CIT Slip Op. 89-40,
quoting C.J. Tower & Sons of Buffalo, Inc. v. United States,
supra at 22).

     The Courts have held that errors in valuation or
classification of merchandise are not mistakes of fact but
mistakes as to the applicable law (see Hambro Automotive
Corporation v. United States, supra, and Mattel, Inc. v. United
States, 72 Cust. Ct. 257, 262-263, C.D. 4547 (1974), and cases
cited therein; see also, Cavazos v. United States, 9 CIT 628
(1985), and Occidental Oil & Gas Co. v. United States, supra). 
However, it has also been held that the contention that a
determination of constructed value necessarily involves a
"construction of the law" is totally without merit (see Lester
Engineering Co. v. United States, 3 CIT 236, 240 (1982)).  In
this latter case, the Court went on to state that:

        Appraisement on the basis of constructed value
        involves a complex compilation and analysis of
        many facts covering various costs, expenses and
        profits, and such factual determinations
        certainly are susceptible to clerical errors,
        mistakes or other inadvertences not amounting to
        an error in the construction of the law.  [3 CIT
        at 240.]

The same is true of the appraisement on the bases of other kinds
of value.  We conclude that errors involving the valuation of
merchandise are not necessarily errors in the construction of the
law for purposes of 19 U.S.C. 1520(c)(1).

     Basically, the error claimed by the representative of the
importer as a basis for relief under 19 U.S.C. 1520(c)(1) is that
Customs inadvertently liquidated the entries because of the ig-
norance of the responsible Customs officers of the ongoing audit
to verify data with regard to a deductive value appraisement and
of the granting by the Area Director of the request to suspend
the liquidation of these entries.  Customs has ruled, in a case
in which there was "some confusion or misunderstanding as to
whether or not Customs had agreed to withhold liquidation pending
resolution of the appraisement question" that the entries under
consideration in the ruling had been liquidated through inadver-
tence and should be reliquidated under section 1520(c)(1) (see
Customs Service Decision 79-386; see also Omni U.S.A., Inc., v.
United States, 11 CIT 480, 663 F. Supp 1130 (1987), in which it
is indicated that inadvertent liquidation could qualify for
reliquidation under section 1520(c)(1) although relief under that
section was denied because the application for relief was
untimely filed).

     In the case of the entries for which reliquidation under 19
U.S.C. 1520(c)(1) is requested there is evidence that Customs may
have agreed to withhold liquidation pending resolution of the
appraisement question, as well as considerable "confusion or
misunderstanding" about any such agreement.  On the basis of the
authorities cited in the foregoing paragraph and in the absence
of evidence other than that in the file, we believe that these
entries may be treated as having been liquidated due to clerical
error, mistake of fact, or other inadvertence not amounting to an
error in the construction of law.

     To result in reliquidation under 19 U.S.C. 1520(c)(1), a
clerical error, mistake of fact, or other inadvertence must be
"adverse to the importer and manifest from the record or
established by documentary evidence."  In this regard, according
to the Court in PPG Industries, Inc., v. United States, 4 CIT 143
(1982), quoting in part from the lower court in Hambro, supra,
(Hambro Automotive Corp. v. United States, 81 Cust. Ct. 29, 31,
458 F. Supp. 1220, C.D. 4761 (1978)):

        ... it is incumbent on the plaintiff to show by
        sufficient evidence the nature of the mistake of
        fact.  The burden and duty is upon the plaintiff
        to inform the appropriate Customs official of the
        alleged mistake with "sufficient particularity to
        allow remedial action."  [4 CIT at 147-148,
        emphasis added.]

     Therefore, action in this case on the requests for
reliquidation under 19 U.S.C. 1520(c)(1) should be governed by
the same criteria as the criteria governing action on the
protests filed under 19 U.S.C. 1514.  That is, such action should
be consistent with the April 19, 1988, ruling.  "Upon receipt of
the necessary information [i.e., documentation necessary to
appraise the merchandise pursuant to deductive value], and
assuming it meets the statutory requirements of deductive value
pursuant to section 402(d)," the requests for reliquidation
should be granted.  If the "necessary information" has not yet
been provided to Customs, the requester for reliquidation should
be given the opportunity to do so by means of a written notice,
enclosing a copy of this ruling and the April 19, 1988, ruling,
stating that the requester has 90 days from the date of the
notice to provide Customs with the required information.  If the
information is not provided within this period, the requests for
reliquidation should be denied.
 
HOLDINGS:

     (1)  If the protests filed in this case under 19 U.S.C. 1514
were timely filed, the protests should be granted if the informa-
tion described in Internal Advice No. 47/86, dated April 19,
1990, has been provided to Customs or is provided to Customs
within the 90 days of the date the protestant is given written
notice to submit the required information.  If the information is
not provided within this time period, the protests should be
denied or, if application for further review was requested,
forwarded for further review.

     (2)  The liquidations of entries in this case for which
reliquidation under 19 U.S.C. 1520(c)(1) was sought may be
treated as having been liquidated due to clerical error, mistake
of fact, or other inadvertence not amounting to errors in the
construction of law under section 1520(c)(1) and reliquidation
should be granted if the information described in Internal Advice
No. 47/86, dated April 19, 1990, has been provided to Customs or
is provided to Customs within 90 days of the date the requester
for reliquidation is given written notice to submit the required
information.  If the information is not provided within this time
period, the requests for reliquidation should be denied.

                              Sincerely,




                              John Durant, Director
                              Commercial Rulings Division